Saudi Stock Exchange Restructures Itself and announced an IPO

The Saudi Stock Exchange (Tadawul) announced yesterday its transformation into a holding (Saudi Tadawul Group), with a new structure that supports the development of the Saudi financial market’s future and ensures continued growth. Another step towards the group’s readiness for the initial public offering during the current year 2021.

The newly established Saudi Tadawul Group will own four subsidiary companies, namely (Tadawul Saudi) as a stock exchange, the Securities Clearing Center Company (Maqasa), the Securities Depository Center Company (Depository), and the new (Wamda) company specialized in existing services and technical solutions on innovation.

Saudi stock exchange officials said the changes would create a platform to strengthen the basic infrastructure for the country’s $ 2.5 trillion stock market, which is the tenth-largest in the world. These steps will fundamentally contribute to developing an advanced financial market, achieving the objectives of the financial sector development program, and supporting the development of the Saudi economy.

The Saudi Stock Exchange indicated that the group would benefit from integrating the services of its subsidiaries and joint business, stressing that the independence of the companies will provide a flexible and innovative work environment to keep pace with the rapid developments in the global and local markets.

According to the statement issued by the Saudi Stock Exchange, the Saudi Tadawul Group will launch innovative services and products that support the market’s infrastructure and ensure the continued development of the financial market, the diversity of investment opportunities available in it, and the benefits of market members, and provide all the needs of market participants.

Saudi Stock Exchange

The Saudi Exchange has been the hottest market for initial public offerings in the Middle East over the past two years, primarily by individual investors and local institutions. In 2019, the Saudi Stock Exchange hosted a $ 29 billion bid for the world’s largest oil producer, Saudi Aramco, with most shares sold to Saudi investors seeking guaranteed dividends.

The stock exchange plans to list its shares in the second half of 2021 and choose financial advisors as soon as this month. After the reorganization is complete, the new group will become the third listed bourse in the Gulf, after the Dubai Financial Market and Kuwait Stock Exchange.

The Saudi Stock Market Index (Tadawul) is owned by the Saudi Public Investment Fund, the sovereign wealth fund. According to its website, it has a capital of 1.2 billion riyals (320 million dollars), divided into 120 million shares.

The Saudi Exchange recorded a net profit of 153 million riyals in 2019. According to the annual report on the Saudi Stock Exchange, the total value of shares traded last year was $ 557 billion, an increase of 137% over the previous year.

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د. مرهف العطاسي

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